Why Nigeria auto industry is not growing — Olaofe

By Theodore Opara
Executive Director, Nigeria Automotive Manufacturers Association, NAMA, Mr Remi Olaofe, has identified reasons behind the nation’s poor performance in the development of its automotive sector.

It should be recalled that in the early 1970s Nigeria had six flourishing auto plants, which supplied automobile needs of the country. This include Anambra Motor Manufacturing Company Limited, ANAMMCO, Peugeot Automotive Nigeria Limited, PAN, Leyland Nigeria Limited, National Trucks Manufacturers Limited, Steyr Nigeria Limited, and Volkswagen Nigeria Limited, VWON.

These companies were producing, passenger cars, buses, trucks and pickpus, but they are presently a shadow of themselves presently. In a chat with the Nigeria Motoring Press, Mr. Olaofe pointed out that rather than take advantage of its huge population and manpower to develop its auto sector, Nigeria is creating automobile hub in Ghana. He regretted that while the nation’s auto policy is yet to be implemented, Ghana has taken the advantage of its policy to grow its auto sector.

“In Ghana, people keep saying it. Nigeria is the source of auto bill in Ghana. Auto bill written here, packaged here, was taken away by somebody and was taken by a country that knows what it wants to do and it has already implemented. I know a number of major players in the automobile assembly in the country that are supposed to be in Nigeria but are now in Ghana. So we are creating an automobile hub in Ghana will now assemble vehicles and ship to Nigeria.”

Regretting the government’s inability to give a legal backing to the nation’s auto policy, Olaofe said: “The government of this country doesn’t see this auto policy as a thing of priority. We seem to continue to enjoy using our own scarce resources to support other economies to thrive which is unfortunate. When you go into vehicle assembly, the stream of industries is unimaginable and you can’t just put a figure to it. From the person that makes the seat, mirror, steering, windscreen, tyres, brake pad, etc. There are many parts you have in a single-vehicle.”

Speaking further on the auto policy, he said: “The only thing that what is delaying the real auto policy is lack of political will.

“There must be a commitment by the government. The commitment will only be derived from their appreciation of what the policy seeks to achieve. It does not augur well if we say we are having an auto policy and all we are doing is just on paper.

“We must look at the micro implication of the auto policy. Is it just to make some people rich? We import vehicles and figures are being lost. Don’t let anyone deceive you with data, because data must be derived from source. But the kind of figure we have from Nigeria Customs, National Automotive Design and Development Council, assemblers, importers are quite different. That makes it very difficult for us to work with any figure. But the population of the country is not what anyone can take for granted. You can’t discuss Africa without Nigeria.”

Olaofe, however, pointed out that cartels were frustrating the policy.

“Absolutely, there is a cartel. For every decision taken, there will always be pro and those against it. It favours some and it does not favour others. Some people don’t like it. I will say to you that it is easier to trade than to manufacture.

“When you bring in your vehicle fully built, all you need is your showroom. You know the cost from the beginning in terms of clearing, duty, keeping it and the profit margin. You can’t do that in manufacturing because there, you have many things to contend with. For example, the personnel issue, raw materials, capital outlay, infrastructure and others. All these will go into assembling of a vehicle. But a vehicle that has already been assembled that you are just bringing in is different.

“So, will those people be happy with auto policy? The answer is capital no. Interestingly, these people are very strong; they have the wherewithal. Don’t forget that the people importing vehicles before are largely the ones going into vehicle assembly. So when they are having seven, eight, nine, ten lines of vehicles that the import, they are just using one line for the purpose of auto policy to assemble.

“Equally, the assembly they are doing here is not the high-end of their products. It is the one that requires minimal resources to just test because nobody brings in money to any economy without being sure of the policy that supports and protects their investment. There is bound to be a cartel and we know the role they are playing.”

On how to get best result for the Nigeria auto industry he said; “Nothing will go well without us coming together. A house that is divided cannot stand. The Nigerian auto assemblers need to come together. NAMA is supposed to be the platform to achieve that. But we understand that majority of them prefer to go their way. So, when everybody chooses to go individually to fight a course, they end up being taken advantage of. We are not speaking the same language.”

The voice lacks unity. And when the voice lacks unity, it will equally lack effectiveness. This is the core challenge we are facing. I sincerely pray that NAMA will come up to this realisation to occupy its rightful place and the members will see the need for them to play what they are supposed to play towards getting these things done. (Vanguard)

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